November 5, 2016

Forward-thinking policy for older M’sia

Malaysia’s population is projected to rise to 41.5 million by 2040, up from 28.6 million in 2010, the Statistics Department said in its Projected Population Report (revised) 2010-2040.

However, the annual growth rate saw a downward trend from 1.8 per cent in 2010, to 0.8 per cent in 2040. “The average annual population growth rate sees a decrease of 0.05 per cent per year,” the department said in a statement issued yesterday.

The department added the population could also be categorised into three main age groups, namely the young (0-14 years), working population (15-64 years) and senior citizens (65 and over). “The median age in 2010 was 26.3 years, and it will increase to 38.3 years (2040),” it said.

Malaysia will have an ageing population. This will lead to new challenges and demands on the health and social services.

Existing institutions for the aged will not be adequate to meet this expected demand. Home care for the elderly in Malaysia is not as well-developed as in countries already with ageing populations.

A study by the Malaysian National Population and Family Development Board estimated that more than half a million of the 2.4 million senior citizens suffered from the “empty nest syndrome”.

While our forebears used to live their senior years with their extended families, much have changed. Due to the concentration of key jobs in the urban areas, the empty nest syndrome has to be dealt with on three prongs.

To take on these challenges, there is a need for sharing of responsibilities between the government, private sector, non-governmental agencies and the community. Community programmes are helpful to caregivers while the private sector will have to step in to meet market demand.

It is the government’s role to ensure adequate health care services, financials as well as infrastructure that are senior-citizen friendly. These facilities should be made available to the less fortunate.

There will be increased government spending on health care and pensions. This will lead to lower collection in income tax. The combination of higher spending commitments and lower tax revenue is a source of concern.

An ageing population could also lead to a shortage of workers. This will push up wages and cause wage inflation. As it is, Malaysia is already too dependent on cheap foreign labour. The situation will worsen if the government doesn’t plan ahead.

We may need to raise the retirement age to increase the local workforce. The private sector can make it attractive for senior employment by offering flexible working practices.

The Employees Provident Fund’s (EPF) introduction of Akuan Emas as a second retirement nest egg for members working beyond age 55 is timely.

The Akaun Emas is one of the initiatives under the enhancement to the EPF schemes as set out under the EPF Act 1991 where all new contributions received after age 55 will be automatically parked under Akaun Emas and can only be withdrawn when members reach age 60. This is to ensure the sufficiency of members’ retirement savings upon reaching age 60.

The time has come to redesign society to cater for this imminent demographic turnaround. We have to start implementing forward-thinking policy changes for an older Malaysia.